SWEDEN Law and Practice Contributed by: Viveka Classon, Karin Rättzén and Sara Stålebring, Advokatfirman Vinge KB
traditional direct insurance marketplace, either by transferring risk through alternative products or trans- ferring risk to alternative carriers. In Sweden, the use of ART remains relatively limited. A broad interpretation of ART transactions includes financing risk through a captive insurance company – an insurance entity that exclusively (re)insures the risks of its parent company or other group companies. Interest in establishing captives has increased glob- ally in recent years, a trend also observed in Sweden. Notably, in 2024, the Swedish fashion retailer H&M received authorisation from the Swedish FSA to establish a captive insurance company. 7.2 Foreign ART Transactions If the contract meets the Solvency II regulations crite- ria for recognition as a risk mitigant, ART transactions from other jurisdictions may be treated as reinsurance contracts in Sweden. 8. Interpreting an Insurance Contract 8.1 Interpretation of Insurance Contracts and Use of Extraneous Evidence There are no Swedish statutory provisions concern- ing interpretation of insurance contracts. However, in Swedish case law, there have been various interpre- tive methods developed when interpreting insurance contracts. Because insurance contracts are typically based on non-negotiable standard forms, the com- mon intention of the parties is difficult to ascertain in practice. Instead, the starting point in the interpreta- tion of insurance terms is typically the objective word- ing of the contract. Besides the wording, the follow- ing points should be considered when interpreting an insurance contract: • the purpose of the clause; • the nature of the insurance and its customer base; • traditions in terms of wording; • consistency with the legal terminology; and • common practice. That which is objectively reasonable and proportion- ate must also be assessed. Only if no result can be
achieved using such criteria is there reason to fall back on other, more general principles of contract interpretation. Swedish procedural law allows for the free sifting of evidence. Extraneous evidence is therefore admissible in the construction when there is a dispute over the meaning of an insurance contract. This means that external circumstances – such as evidence about negotiations or written communication relating to the agreement – are permitted. 8.2 Warranties Warranties in an insurance contract refer to the spe- cific promises made by the policyholder, in which they guarantee to either take or refrain from taking certain actions. Through warranties, the insurance undertak- ing limits its risk. It is uncommon for Swedish insurance contracts to include warranties as outlined above. However, it is standard for these contracts to contain security pro- visions. If a policyholder fails to adhere to the speci- fied security provision, they risk having their insur- ance indemnity reduced or denied in the event of a claim. One common security provision is that the policyholder must handle and store property with care to minimise the risk of damage or loss. This require- ment is typically more stringent for valuable items, and the policyholder must never leave such property unattended. The insurer must emphasise the security provision to the insured party, otherwise it cannot be enforced. 8.3 Conditions Precedent Conditions precedents to the validity of the insurance contract and the attachment of risk or to the insurer’s liability are, to some extent, subject to mandatory pro- visions in the ICA. If payment of the initial premium is a condition prec- edent to risk for a consumer insurance, this must be set out in the policy terms. As regards ongoing pay- ment of premiums, the ICA expressly regulates when and how the insurance contract can be terminated due to late payments. The requirements are manda- tory for the benefit of the insured. There are mandatory provisions regarding termination due to late payments
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